AC 302 CHAPTER 13 QUESTION 6

AC 302 CHAPTER 13 QUESTION 6
Name				Date						
Instructor					Course						
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield											
Primer on Using Excel in Accounting by Rex A Schildhouse											
											
E13-6 (Compensated Absences) Matthewson Company began operations on January 2, 2012. It employs								9 	individuals who work		8 
-hour days and are paid hourly. Each employee earns				10 	paid vacation days and		6 	paid sick days annually. Vacation days 			
may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.											
											
		"Actual Hourly
Wage Rate"		"Vacation Days Used
by Each Employee"		"Sick Days Used
by Each Employee"					
		2012	2013	2012	2013	2012	2013				
		$12.00 	$13.00 	0 	9 	4 	5 				
"Matthewson Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to
accrue vacation time."											
											
		Year in Which Vacation Time Was Earned			 Projected Future Pay Rates  Used to Accrue Vacation Pay						
											
		2012			$12.90 						
		2013			$13.70 						
											
Instructions:											
(a) (1) Prepare journal entries to record transactions related to compensated absences during 2012.											
											
		2012	To accrue the expense and liability for vacations								
			Account title			Amount		(1)			
			Account title				Amount				
											
		2012	To record sick leave paid								
			Account title			Amount		(2)			
			Account title				Amount				
			Account title				Amount	(2)			
		2012	To record vacation time paid								
			Account title			Amount					
			Account title				Amount				
											
(a) (2) Prepare journal entries to record transactions related to compensated absences during 2013.											
		2013	To accrue expense and liability for vacations								
			Account title			Amount		(3)			
			Account title				Amount				
											
		2013	To record sick leave paid								
			Account title			Amount		(4)			
			Account title				Amount				
			Account title				Amount	(2)			
		2013	To record vacation time paid								
			Account title			Amount					
			Account title			Amount		(5)			
			Account title				Amount	(6)			
											
	employees		per hour		hours per day		days				
(1)	Number	×	Amount	×	Number	×	Number	=	Formula	(1)	
(2)	Number	×	Amount	×	Number	×	Number	=	Formula	(2)	
(3)	Number	×	Amount	×	Number	×	Number	=	Formula	(3)	
(4)	Number	×	Amount	×	Number	×	Number	=	Formula	(4)	
(5)	Number	×	Amount	×	Number	×	Number	=	Formula	(5)	
(6)	Number	×	Amount	×	Number	×	Number	=	Formula	Formula	(6)
Note: Vacation days and sick days are paid at the employee- current wages											
											
(b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2012, and 2013.											
				Accrued liability at year-end			Accrued liability at year-end				
											
				2012			2013				
Jan. 1 balance				Amount			Amount				
Plus accrued				Amount			Amount				
Less paid				Amount			Amount				
Dec. 31 balance				Formula		(1)	Formula		(2)		
											
	employees		per hour		hours per day		days				
(1)	Number	×	Amount	×	Number	×	Number	=	Formula		
											
(2)	Number	×	Amount	×	Number	×	Number	=	Formula		
	Number	×	Amount	×	Number	×	Number	=	Formula		
									Formula